Bank of England (BoE) Deputy Governor Sarah Breeden gave her views on the recently announced United States (US) tariffs and their potential economic impact.

Key Quotes

  • Latest developments have a material impact on economic outlook and risks.
  • World has moved on significantly since March MPC meeting.
  • US tariffs are biggest change in trade policy in a century.
  • Very unclear what overall landscape will be for tariffs in medium term.
  • Overall tariffs are likely to lower UK growth.
  • Impact on inflation from US tariffs not clear cut.
  • So far Sterling has not weakened due to tariffs, this could change.
  • Too early to call overall impact on inflation for UK and hence appropriate monetary response to tariffs.
  • Government bond yields have been volatile.
  • We judge the risk of a further sharp correction to risky asset prices remains high.
  • The UK banking system will still have capacity to support the economy even if conditions worsen substantially.
Source: Fxstreet